E-Business
Presidential Tax Reforms Committee Moves to Boost BPO Business in Nigeria
Worried by the dwindling fortune of Business Process Outsourcing (BPO) business in the country, Presidential Fiscal Policy and Tax Reforms Committee has identified the impediments to its growth and moves to remove them to ensure that the country takes a pride place in the sector.
Taiwo Oyedele, chairman of the committee, said at a workshop for journalist in Lagos on Thursday that his committee identified tax structure in the country which hinders international organizations from hiring Nigerians living in the country to work for them.
“Our existing tax structure demands that any company outside of Nigeria that hires Nigerians living in the country to work remotely will be expected to pay tax on the company’s income as well as on the income of the Nigerian working for the company.
“This tax structure has pushed overseas companies away from Nigeria to countries such as India and Philippines that their BPO sector have grown exponentially. With the removal of tax on the company’s income, we have created a level playing ground for BPO business to flourish in the country,” he said.
It would be recalled that Kashifu Inuwa Abdullahi, director general, the National Information Technology Development Agency (NITDA) had put the worth of Business Process Outsourcing (BPO) ecosystem in the country at $285.8Million.
According to Inuwa, “today, Nigeria Outsourcing sector worth $285.8M employing 16,540 Nigerians mostly living in Nigeria and working for companies outside Nigeria.
“We started in 2020 with a strategy and engaged with the Business Process Outsourcing (BPO) to develop the strategy and some of them started operations in the mid of 2020 and we want to expand this because we believe the sector will create more jobs than any other sector in Nigeria”.
Oyedele, added that his committee has proposed a single digit number of 8 taxes to be collected by all the tiers of governments in the country.
“One of the critical challenges facing the tax system in Nigeria is the shockingly high level of non-compliance as a result of low tax morale. Tax Morale is the willingness to comply with taxes and the belief that tax evasion is wrong,” he noted.
He said the principle behind these is to do away with nuisance taxes with very low revenue yield, high cost of collection and ultimate burden on the poor and small businesses.
“Focus on high revenue yielding taxes, that are broad-based and relatively ease to collect. Merge taxes and levies that are imposed on the same or substantially similar tax base. Institutionalize the tax harmonization reform to ensure sustainability,” he stated.
According to him, “the outcomes expected include; Eliminate informal & implicit taxes, harmonise tax administration, rationalize tax incentives, leverage technology and big data, modernise customs administration, simplify compliance, optimise resources and government assets.
Budget better – Restructure the budget (classify items under infrastructure; human capital investment; personnel cost, headcount & productivity; administrative overheads; debt service & sinking funds), fully implemented zero based budgeting, and introduce long term appropriation.
Spend better – Tackle systemic corruption, prioritise spending on basic needs to address multidimensional poverty, restrict borrowing to productive spending and self-financing projects, leverage PPP and equity financing for viable projects, enhance public procurement effectiveness.
Manage better – Leverage technology for revenue, debt, and expenditure management. Adhere to fiscal rules and benchmark with strict penalties for violations. Establish a national fiscal risk framework and processes to prevent, detect, and correct financial infractions.
Report better – Harmonise and standardise reporting, provide transparent and timely information, enhance audit & internal control, administer consequences.
The eight proposed taxes are; Income Tax; Value Added Tax; Property tax; Customs duties; Excise tax; Stamp duties; Special levy and Harmonised levy.
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Board of Directors of Tolaram, one of Nigeria’s leading conglomerates, has appointed Adesuwa Ladoja as the Managing Director/Chief Executive Officer of the Lagos Free Zone (LFZ) Company, one of its subsidiaries.
Adesuwa Ladoja
In a statement issued by the Board of Directors to its stakeholders, the appointment is effective July 1, 2024.
Adesuwa Ladoja takes over from Dinesh Rathi, who has been moved to the position of Group Finance Director of Tolaram.
According to the release, Ladoja brings extensive experience in infrastructure development and strategic leadership.
“She has been a key player in the development of the Lekki Deep Sea Port project, leading to its financial close in 2020, the completion of its construction in 2022 and commercial operation in 2023. Her leadership and strategic vision have been critical to the project’s success.”
Ladoja, a Lawyer, started her career in general commercial practice and litigation as an Associate at Ajumogobia & Okeke. This was followed by over a decade at KPMG Professional Services, where she specialised in Tax, Regulatory, and People Services.
She holds a Bachelor of Law degree (LL. B Hons) from Obafemi Awolowo University and a Master of Law (LL.M Hons) degree in International Business Law from King’s College, University of London.
Ladoja is a member of the Nigerian Bar Association and several other professional bodies and a notary public of the Supreme Court of Nigeria.
According to the Board, Ladoja’s multifaceted expertise will be invaluable in driving the Lagos Free Zone Company’s growth and innovation agenda.
Ladoja said: “I am honored to be given this opportunity, and I look forward to continuing the good work done by Dinesh and the team at LFZ in creating a unique industrial ecosystem which places sustainability and customer-centricity at its core.
“Lagos Free Zone with its integrated Lekki Port is the perfect illustration of what ease of doing business represents and we look forward to hosting more companies.”
Established in 2012, Lagos Free Zone is an award-winning port-based industrial zone (850 hectares) in Lagos, Nigeria, with over $2.5 billion committed FDI projects to date.
Owned and promoted by Tolaram, LFZ is located in Lekki, the sunrise development corridor in Lagos. With its vision to be the preferred industrial hub in West Africa.
KuCoin, a leading cryptocurrency exchange, has announced it will begin collecting a 7.5 percent value-added tax (VAT) on transaction fees for its users in Nigeria.
The decision follows a recent regulatory update in the country, prompting KuCoin to introduce the VAT.
In a statement released on July 3, KuCoin confirmed that the VAT deduction will take effect from July 8. The company clarified that the 7.5 percent VAT will be applied specifically to the transaction fee, not the total amount. For example, if a user purchases $1,000 worth of Bitcoin with a 0.1 percent fee, the transaction fee would be $1. Consequently, the VAT on this fee would be $0.075, making the net amount for the transaction $998.925.
The statement read; “We are writing to inform you of an important regulatory update that impacts our users from Nigeria.
“Starting from July 8th, 2024, we will begin collecting a Value-Added Tax (VAT) at a rate of 7.5% on transaction fees in each trade for users whose KYC information is registered in Nigeria.
“Nb: The 7.5% is only charged on the 0.1%/0.05% transaction fee and not your total amount which will be remitted.
“Please note that the VAT will be applied to the transaction fees in each trade, not the transaction amount, and covers all transaction types on KuCoin platform.”
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